Final
STAFF SUMMARY OF MEETING
HOUSE
COMMITTEE ON
FINANCE
Date:
02/03/2005
ATTENDANCE
Time:
09:41 AM
to
12:36 PM
Benefield
X
Cloer
X
Place:
HCR 0107
Crane
X
Frangas
X
This Meeting was called to order by
Garcia
X
Representative
Vigil
Jahn
X
Marshall
X
This Report was prepared by
Massey
X
Ron Kirk
May M.
X
McCluskey
X
Witwer
X
Judd
X
Vigil
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed:
Action Taken:
HB05-1052
HB05-1158
HB05-1125
HB05-1121
HB05-1005
HB05-1096
Amended and Referred to the Committee on Approp.
Laid Over
Amended and Referred to the Committee of the Whole
Referred to the Committee on Appropriations
Referred to the Committee on Appropriations
Referred to the Committee of the Whole
09:41 AM -- House Bill 05-1052 - Concerning the Property Tax/Rent and Heat/Fuel Expense Assistance Program
Representative Gallegos, prime sponsor, explained House Bill 05-1052 increases the maximum qualifying income for eligibility to participate in the state Property Tax/Rent and Heat/Fuel Expense Assistance Program. Representative Gallegos distributed amendment L.005 (Attachment A), a technical change, and a Legislative Council Staff memorandum on a fiscal assessment of proposed amendment L.005 (Attachment B).
Representative Vigil asked Mr. Bob Lackner, Office of Legislative Legal Services, to explain the amendment's provisions.
09:57 AM --
Mr. Bob Lackner, Office of Legislative Legal Services, explained the provisions of L.005. The amendment is a technical amendment that makes an adjustment to the income levels that allow filers to file for the full grant amounts. The amendment aligns the income thresholds for qualifiers to match the intent of the sponsor.
BILL:
HB05-1052
TIME:
10:01:56 AM
MOVED:
Cloer
MOTION:
Moved amendment L.005 (technical amendment). The motion passed without objection by those members present.
SECONDED:
Massey
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Jahn
Marshall
Massey
May M.
McCluskey
Witwer
Judd
Vigil
Not Final YES:
0
NO:
0
EXC:
0
ABS:
0
FINAL ACTION:
Pass Without Objection
BILL:
HB05-1052
TIME:
10:03:04 AM
MOVED:
Cloer
MOTION:
Refer HB 05-1052, as amended, to the Committee on Appropriations. The motion passed on a 9-4-0 vote.
SECONDED:
Massey
VOTE
Benefield
Yes
Cloer
Yes
Crane
No
Frangas
Yes
Garcia
No
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
No
McCluskey
No
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES:
9
NO:
4
EXC:
0
ABS:
0
FINAL ACTION:
PASS
10:07 AM -- House Bill 05-1158 - Concerning the Voice Over Internet Protocol Tax Freedom Act
Representative Knoedler, prime sponsor, discussed a strike-below amendment that he had e-mailed to committee members. (This amendment was not discussed at the committee meeting.) Representative Vigil informed Representative Knoedler of the finance committee policy that requires bill sponsors who have amendments greater than one page, to have the amendment distributed to finance committee members 24 hours prior to the committee meeting. Representative Vigil pulled the bill off the table.
10:10 AM -- House Bill 05-1125 - Concerning the TABOR Refund Mechanism for the Charitable Contributions Deduction
Representative Vigil, prime sponsor, explained that there are a total of 19 TABOR refund mechanisms that are available if there is excess state revenue above the amount that the state is constitutionally authorized to retain. Eighteen of the refund mechanisms require that a "trigger" amount (adjusted annually for growth in Colorado personal income) be attained in order for the TABOR refund to be authorized. The sales tax refund mechanism does not have a threshold. Representative Vigil noted that a refund mechanism is available that allows taxpayers who claim a standard deduction on their federal income tax return to claim an exemption for charitable contributions that are in excess of $500. He explained that House Bill 05-1125 changes the threshold for the charitable contributions refund mechanism from an estimated $432.7 million to $100 million in excess revenue beginning with FY 2005-06.
The committee briefly discussed the TABOR refund mechanisms.
The following persons testified:
10:14 AM --
Mr. Charles Shimanski, Chief Executive Officer for the Colorado Association of Nonprofit Organizations (CANPO), commented on the growing role of nonprofit organizations in providing health and human services to people in Colorado who have been impacted by the recent state budgetary cuts. He commented that House Bill 05-1125 will provide an incentive to persons to make more donations to nonprofit organizations in Colorado. He stated that this is important because many of the nonprofit organizations that provide vital services are financially stretched. Mr. Shimanski testified in support of the measure.
Representative Vigil distributed amendment L.001 (Attachment C) and explained that the amendment makes the contribution deduction permanent if voters in the November 2005 statewide election approve a revenue change that provides additional revenue for state programs. The committee members discussed how amendment L.001 would reduce the revenues available under the state sales tax refund.
10:30 AM --
Mr. Howard Paul, representing the Colorado Search and Rescue Board and the Alpine Rescue Department, testified in support of the measure. He explained how many Colorado alpine rescue organizations depend entirely on donations. He discussed the types of services and rescue operations that are carried out in Colorado and pointed out that in many cases, volunteers often pay out-of-pocket expenses for search and rescue equipment. Mr. Paul closed by saying that House Bill 05-1125 may bring in additional donations that can ultimately offset the out-of-pocket costs that volunteers incur for basic rescue equipment.
10:38 AM --
Mr.
Jesse Wolff, Executive Director for Community Shares, (a nonprofit umbrella organization), testified in support of the legislation and stated that tax benefits work to provide moneys to nonprofit organizations that heavily depend on donations to fund services. He explained that House Bill 05-1125 will encourage more people to make contributions to nonprofit organizations that provide vital services to the people of Colorado.
BILL:
HB05-1125
TIME:
10:45:55 AM
MOVED:
McCluskey
MOTION:
Moved amendment L.001. (The amendment makes the contribution deduction permanent if voters in the November 2005 statewide election approve a revenue change that provides additional revenue for state expenditures.) The motion passed without objection.
SECONDED:
Crane
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Jahn
Marshall
Massey
May M.
McCluskey
Witwer
Judd
Vigil
Not Final YES:
0
NO:
0
EXC:
0
ABS:
0
FINAL ACTION:
Pass Without Objection
BILL:
HB05-1125
TIME:
10:52:49 AM
MOVED:
Garcia
MOTION:
Refer HB 05-1125, as amended, to the Committee of the Whole. The motion passed on a 13-0-0 vote.
SECONDED:
Cloer
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES:
13
NO:
0
EXC:
0
ABS:
0
FINAL ACTION:
PASS
10:54 AM -- House Bill 05-1121 - Concerning Substitute Service of Process Upon the Secretary of State
Representative T. Carroll, prime sponsor, explained that House Bill 05-1121 allows for a summons and complaint or other process to be served on the Secretary of State when the driver of a vehicle involved in an accident cannot be found. A plaintiff must wait 120 days and make reasonable efforts to locate and serve the defendant in person. After serving the Secretary of State, a plaintiff must also serve the defendant's insurance company, if any, and mail a notice and an affidavit of compliance to the defendant's last known address within 10 days. Fees for the substitute service will be set by the Secretary of State, who must keep a record of all filings.
The committee discussed whether the Secretary of State was in agreement with the legislation and if the legislation would impose additional costs on the office.
The following persons testified:
11:03 AM --
Mr. Robert Ferm, American Insurance Association, expressed some concerns with House Bill 05-1121. He explained that the bill may cause insurance companies to defend a case without dealing with the party who caused an accident. He mentioned that he would support the legislation if it were amended. He stated that as drafted, the bill does not meet the test for due process. He discussed case law dealing with due process. Specifically, he noted that the proposal is vague in respect to language pertaining to the irrevocable appointment that may compromise the test for due process (page 2, line 10). Mr. Ferm also mentioned that the bill does not define reasonable diligence (page 2, lines 17-19), nor does the bill provide for a process that allows for notification after the Secretary of State receives documentation.
Representative Carroll discussed case law for civil cases that applied to Mr. Ferm's concerns.
11:16 AM --
Mr. Murray Ogborn, Colorado Trial Lawyers Association, testified in support of the legislation. He commented on the need for the legislation and stated that the bill can protect both the consumer and insurance companies when a personal service of process cannot be performed.
BILL:
HB05-1121
TIME:
11:21:27 AM
MOVED:
Cloer
MOTION:
Refer HB 05-1121 to the Committee on Appropriations. The motion passed on a 13-0-0 vote.
SECONDED:
McCluskey
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES:
13
NO:
0
EXC:
0
ABS:
0
FINAL ACTION:
PASS
11:24 AM -- House Bill 05-1005 - Concerning the Creation of a Revenue Shortfall Relief Fund
Representative Lundberg, prime sponsor, explained that HB 05-1005 creates a Revenue Shortfall Relief Fund and requires the General Assembly to appropriate one-twelfth (1/12th) of the annual increase in state General Fund appropriations to the fund. The requirement would begin with FY 2006-07, but would only apply in years when General Fund revenues are sufficient to fund the other 11/12ths of the currently-allowable 6 percent increase in General Fund appropriations. In effect, the bill requires that any moneys over 5.5 percent growth in General Fund appropriations, up to the currently-allowable 6 percent growth, be appropriated to the Revenue Shortfall Relief Fund.
The committee discussed whether the bill provides for a dollar-amount ceiling to determine when the fund stops growing. The committee then discussed the 6 percent limit and questioned whether using a 5.5 percent limit would allow the state to fund the current level of services.
BILL:
HB05-1005
TIME:
11:39:35 AM
MOVED:
Cloer
MOTION:
Refer HB 05-1005 to the Committee on Appropriations. The motion passed on a 8-5-0 vote.
SECONDED:
Frangas
VOTE
Benefield
No
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
No
Marshall
No
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
No
Vigil
No
Final YES:
8
NO:
5
EXC:
0
ABS:
0
FINAL ACTION:
PASS
11:43 AM -- House Bill 05-1096 - Concerning Mesa State College
Representative Penry, prime sponsor, explained the provisions of the bill and distributed amendments L.006 (Attachment D) and L.008 (Attachment E), a fact sheet on House Bill 05-1096 (Attachment F), a letter from the State Treasurer to Mr. Tim Foster, President, Mesa State College (Attachment G), and a set of cash flow tables for Mesa State College for FY 2004-05 (Attachment H).
Representative Penry discussed the background on House Bill 05-1096, commenting that under current law, all funds received or collected by Mesa State College are held and invested by the State Treasury. Accounts held in the name of the college are credited with investment income earned from the college's share of the treasury investment activities. All state institutions of higher education have similar arrangements with the exception of the University of Colorado, which has authority to invest a portion of it's cash in equities. Currently, the CU Regents have authorized investment of about 25 percent of its total $660 million portfolio in equities. CU pays an outside investment manager the equivalent of 21.5 basis points (0.215 percent) per year to perform this service, compared to 10 basis points (0.10 percent) per year for Treasury pooled funds to pay for bank service charges.
Representative Penry explained that House Bill 05-1096 authorizes the Secretary and Treasurer of Mesa State College to be members of the Board of Trustees for the college. The bill requires the board to establish an investment advisory committee consisting of at least five members to make investment recommendations to the board. The investment advisory committee, at a minimum, is required to include the college treasurer, the State Treasurer, a member of the board, and two representatives from the financial community.
The bill expands the investment authority the board may exercise on behalf of the college by allowing the board to hold investments in funds in which the participating trusts or accounts have undivided interests, and certificates of stock in the name of a nominee of their selection without disclosing their fiduciary capacity.
The chairman asked Representative Penry to discuss the amendments that were distributed to the committee. Representative Penry explained that amendment L.006 would require the Mesa Board of Trustees to invest at least 75 percent of its revenues in the same type of investments that the State Treasurer invests in and allows the remaining 25 percent to be invested in equities. He explained that amendment L.008 would have required the Board of Trustees for Mesa State College to liquidate all investments if the amount of cash available for expenditure by the State Treasurer for any given day drops below $100 million. He stated that this amendment is intended to act as a cash-flow safeguard.
The following person testified:
12:16 PM --
Mr. Ben Stein, Deputy State Treasurer, commented that the Treasurer is opposed to the bill. He commented that the primary reason the Treasurer opposes the bill is that no public entities are authorized to invest in equities except the University of Colorado. He explained that the funds that the bill addresses are public funds, or taxpayer dollars that need to be treated appropriately and the only type of investments that qualify are high-quality income investments. He noted that this was a policy decision that was made by the legislature years ago. Mr. Stein stated that the moneys that this bill addresses are partly General Fund moneys and student tuition revenues which are truly public moneys. Mr. Stein closed by touching upon the risk and liquidity issues that are tied to equity investments and the types of investments that are made by the State Treasurer.
The committee briefly discussed whether the amendments offered by Representative Penry would disadvantage investment strategies made by the Mesa College Board of Trustees.
BILL:
HB05-1096
TIME:
12:28:44 PM
MOVED:
Massey
MOTION:
Moved amendment L.008. (The amendment would have required the Board of Trustees for Mesa State College to liquidate all investments if the amount of cash available for expenditure by the State Treasurer for any given day drops below $100 million.) The motion died due to a lack of a second.
SECONDED:
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Jahn
Marshall
Massey
May M.
McCluskey
Witwer
Judd
Vigil
Not Final YES:
0
NO:
0
EXC:
0
ABS:
0
FINAL ACTION:
TIE
BILL:
HB05-1096
TIME:
12:31:45 PM
MOVED:
McCluskey
MOTION:
Refer HB 05-1096 to the Committee of the Whole. The motion passed on a 7-5-1 vote.
SECONDED:
Marshall
VOTE
Benefield
No
Cloer
No
Crane
Yes
Frangas
Yes
Garcia
Excused
Jahn
No
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
No
Vigil
No
Final YES:
7
NO:
5
EXC:
1
ABS:
0
FINAL ACTION:
PASS
12:36 PM
Adjourn.